Obama Considers Regulating Stock Market Bubbles
This is a little concerning to me. The president is looking at extending the tentacles of government into the free market. He wants to regulate the stock market in a manner that has never been seen before. His administration would be on the lookout for new bubbles emerging in the stock market and then he will squash them. (Let us hope he takes terrorism man caused disasters this seriously.)
We will have a Bubble Czar, or as the administration calls the position; a systemic regulator. That gives you a warm and fuzzy feeling, doesn’t it.
If new threats are spotted, he said Obama would use “regulatory oversight to prevent guys who want to make a quick buck from doing real harm to the economy. … That is what it means to get out of the bubble-and-bust cycle.”
If he sees someone making too much money in the stock market he is going to put an end to it. He wants to burst a bubble before it becomes a bubble and according to the article linked to above, the best way to do that is raising interest rates.
Correct me if I am wrong but wouldn’t raising interest rates hurt EVERY American and not just the Americans who are foresighted and opportunistic enough to see an opportunity to make a little money in the stock market? And won’t this also affect average Americans who might have some of their 401k plans invested in the market?
The president would also ORDER banks to stop lending money to people with certain kinds of assets. Think about that. He wants to tell banks who they can and cannot lend money to.
Charles Blahous sums it up well:
If they are talking about the government affirmatively acting to slow growth in good times, that would be very troublesome
The government is looking at ways to slow people down from making money and that is very troublesome to me also. Once the government has control over the stock market and total control over the economy; and once the government can stop people from making money if they see a threat; and once the government has control of who can borrow money, what is next?
America's Watchtower 
Bubble Czar huh? How would you like that to be your legacy? “I was Barack Obama’s Bubble Boy”.
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This sounds like something that originated from Bernanke; he was talking about having the fed do this a while back. It is a problem because the recessions of 2001 and 2007 were the result of bubbles bursts.
You are correct that raising interest rates hurts every American. This is the mechanism that has been used by Greenspan (not sure about Bernanke) to control inflation caused by the labor side of economy. In other words, when wages started rising too fast, he would raise interest rates to slow it down. How that is not considered interfering with the free market is beyond me.
To me, this appears that they are wanting to apply the same rules to investors that have been applied to labor. When the investment side of the economy starts to overheat, they’ll put the brakes on to slow it down.
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